The Government has announced a new scheme for relief on investments in start-up companies to be called Seed Enterprise Investment Scheme (SEIS), and it will be available from 6 April 2012. It will run alongside the existing Enterprise Investment scheme (EIS) but will be targeted at start-up companies.
The main features of the new scheme are as follows:
· Income tax relief of 50% of the investment will be available to individuals who invest in qualifying companies, irrespective of their marginal rate of tax;
· An annual investment limit of £100,000 per individual will apply;
· A cumulative investment limit of £150,000 per company will apply;
· Gains arising on the disposal of other assets in 2012/13 will attract a capital gains tax exemption if they are reinvested through the SEIS in the same year.
The enhanced rate of relief reflects the inherently risky nature of small start-up companies
In addition to announcing the new scheme, the Government has confirmed that simplifications will be made to the existing rules for Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs).
For further information or advice on this topic please contact Ward Williams.
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